Salary

• Piecemeal?

  • Workers are paid according to the number of items produced / action performed.
  • Workers are not remunerated for the number of hours worked, regardless of how long it takes them to make the items.
  • Mostly used in factories particularly in the textile / technology industries.
• Time-related salary determination:

  • Workers are paid according to the amount of time they spend at work / on a task.
  • Workers with the same experience / qualifications are paid on salary scales regardless of the amount of work done.
  • Many private and public sector businesses use this method.
• Salary determination vs BCEA:

  • According to the BCEA businesses may use different remuneration methods to pay their employees.
  • Payment of salaries should be based on whether the employee is permanent or employed on a fixed contract.
• Fringe benefits Include:

  • Pension
  • Medical ail
  • Provident fund
  • Allowances
  • Compulsory benefits
• Pension:

  • A fund that provides members with an income when they retire.
• Medical aid:

  • Funds used by people for medical expenses.
• Provident fund:

  • A fund similar to a pension fund, except that the entire amount is paid out when a member retires.
• Allowances:

  Car / travel / housing / call phoe
• Compulsory benefits:

  • Employers must pay unemployment insurance contributions of 2% of the value of each worker's salary, per month, to the fund.
• Advantages of Fringe benefits on businesses:

  • Attracts skilled employees who may positively contribute towards the business goals.
  • Improved productivity resulting in higher profitability.
  • A business saves money as benefits are tax deductible.
  • It increases employee satisfaction / loyalty as they may be willing to go the extra mile.
• Disadvantages of Fringe benefits on businesses:

  • Fringe benefits are additional costs that may result in cash flow problems.
  • Administrative costs increase as benefits need to be correctly recorded for tax purposes.
  • Workers only stay for the fringe benefits and may not be committed to the task / business.
  • A business which cannot offer fringe benefits fails to attract skilled workers
• Unemployment Insurance Fund (UIF):

  • The fund offers short-term financial assistance to workers when they become unemployed or are unable to work due to illness, maternity or adoption leave.
  • The fund also assists the dependants of a contributing worker who has died.
  • The employer and worker each contribute 1%'